Student credit cards are cards with lower credit limits, no annual fee, and generally lower interest rates. They are designed for young people with little to no credit as a way to help students build their credit while in school. According to U.S. News reports, however, less than 35% of students say building credit is the main reason for getting a credit card. This may be caused by the fact that students do not realize the reasons why building credit is so important.
Some states allow employers to view the credit report of job applicants, so building credit can be beneficial for getting a job. A credit report does not include your credit score but does include debt and payment history (2 key factors that affect credit score). Accruing debt and being late on payments could indicate a lack of organization, and therefore hurt your job prospects.
Those with lower credit scores are seen as more likely to get in an accident, so auto insurance premiums are also often higher for people with low credit scores. If you want to pay less on car insurance at a young age, you should build credit.
According to a study by TransUnion, nearly half of landlords say credit scores are a top-three factor when looking at rental applicants. When looking for your first apartment, you’ll want a high credit score to ensure a lower deposit requirement (how much you’ll have to give upfront when moving in). Also, a high credit score will make you more likely to get approved as an apartment renter.
Credit cards also have rewards systems that incentivize spending and mitigate the risk of theft associated with carrying around cash. Given all of these benefits, it is very important to get a credit card at the student age. Outlined below, in no particular order, are Vola’s top four credit cards for students.
Discover it Student Cash Back card
This card offers the best bonus rewards out of student cards. With this card, you can earn 5% cashback in a specified bonus category each quarter. For April-June, this category includes Uber, Lyft, Gas Stations, Home Depot, and Wholesale Clubs. The card also doubles all rewards for the first year after opening your card, making it an excellent temporary option. Students are also given an extra $20 for a GPA above 3.0, adding a nice extra incentive
This card also offers a great cashback option — 1% cashback on everything, which is doubled for the first year. The 5% cashback bonus category adds on to this as well. Like most other student credit cards, this card also has no annual fee and has a low minimum credit score needed. This Discover card does have an above-average APR (interest rate for borrowing the money) than other student cards. The card’s APR is 11.99% to 22.99% depending on many factors.
Overall, the Discover it Student Cash Back card is great for responsible credit card holders who will consistently pay their bills on time. With great bonus rewards and cashback options, those who avoid borrowing money will enjoy great benefits while building their credit.
Deserve EDU Mastercard for Students
The Deserve EDU card requires no credit history, making it great for student-aged people who have not built much credit. Those who use this card will also enjoy a free year of Amazon Prime Student–this may be a key factor for those who like to online shop. The card also does not require a social security number, making it the best option for international students.
With a mediocre cashback option of 1% cashback on all purchases, the Deserve EDU Mastercard does not provide the best rewards of student credit cards. Aside from the free year of Amazon Prime Student, this card offers no welcome bonus. The card also has above average regular APR at 18.74% for a student credit card.
The Deserve EDU Mastercard is good for students with very minimal credit history and is the best option for international students. The card does have fewer opportunities for rewards and a higher APR, making it a less enticing option for some students. However, given that rewards are often minimal for any student card, the card is a great option for a student looking to build credit from the ground up.
Bank of America Cash Rewards Credit Card for Students.
This Bank of America card offers some of the best cashback options for student-aged adults. Users of this card can set a category for 3% cashback. If you spend a disproportionate amount of money on dining, traveling, or online shopping, having a choice for this category can be beneficial. You also receive 2% cash back on groceries and 1% cashback on everything else with this card. The card also offers a $200 cash rewards bonus if you make over $1000 dollars in your first 3 months with the card.
Like the other cards mentioned, this card has no annual fee and minimal credit needed. Another added benefit is that users of this card receive great feedback on how to build their credit. You can opt-in to see your FICO score automatically updated monthly, with information on factors affecting your score. APR is zero for the first 15 billing cycles, which is a longer period than the other cards mentioned. However, after this period, you can risk having an APR as high as 24% if you don’t have great credit. This is very high, so there is pressure to build credit in the first year and a quarter.
The Bank of America Cash Rewards Card is best for students and young adults expecting to build significant credit in the next few years. The card offers great cashback options initially and requires little to no credit history to apply for. Interest rates can be very high if you do not build much credit in your first 15 billing cycles. At the very least, this card is a great option for a short period of time that strongly incentivizes making money and building credit.
Citi Rewards+ Student Card
The Citi Rewards Card is a viable option for a student because it has good cashback options, no annual fee, and 0% APR for 7 months. The cashback for this card uses a unique points system–you will earn 2 points per purchase at supermarkets and gas stations (about 2% cashback) and 1 point everywhere else (about 1%). Rewards are rounded to the nearest 10 points, so small purchases yield high rewards (10 points for a $4 coffee). As mentioned earlier, this card also has no annual fee and 0% APR for 7 months, allowing students to build credit early on.
This card certainly has its shortfalls for certain demographics. Since the 0% APR lasts for only 7 months and can be up to 24.49% after this, those who expect to borrow money after 7 months should look at a card in which this 0% period lasts longer. Other cards offer better rewards for dining out and travel–This card only offers 1% cashback on dining out and actually has a 3% transaction fee on foreign purchases.
The Citi Rewards+ Student Card is best for students who have already built credit to the point where they have a good credit score. Despite having no annual fees and minimal credit needed, students with low credit who use this card will risk paying high fees for borrowing money and will not receive the best rewards.
Credit cards not only save you money on purchases, but building credit can help you save thousands of dollars later in life. If you don’t have a credit card yet, you should get one as soon as possible.